A total of 19,000 people were retrenched or had their contracts aborted last year, up from 15,580 the year before. Retrenchments alone hit 16,600, according to preliminary full-year data released by the Ministry of Manpower (MOM) last week.
Economic slowdown and slower growth rate has taken a toll on the labour market in 2016, which saw the highest number of layoffs since the global financial crisis in 2009. The impact was severely felt across three main industry sectors namely: manufacturing, services, and construction.
Economists believe this pain could continue well into H2 2017 as well, before some positive ripples could be felt later this year. With upward pressure on wages last year, the median income grew by just 0.7 per cent for Singaporeans in full-time jobs, to $3,823, including employer contributions to the Central Provident Fund, Straits Times reports.
Expecting the conditions to worsen further, and giving cautious hiring intentions, OCBC economist Selena Ling thinks, the real wage growth could stagnate with headline inflation reverting to positive territory.
There was sustained income growth at the median and 20th percentile over the last five years. The median income (including employer CPF contributions) of full-time employed citizens rose by 25% (4.5% p.a.) in nominal terms from 2011 to 2016, or 16% (3.1% p.a.), after adjusting for inflation.
Income at the 20th percentile of full-time employed Singaporeans also grew at a similar pace (17% or 3.2% p.a. in real terms). This was unlike in the earlier five years (2006 to 2011) when it grew at a slower rate than the median.
From 1 January 2017, employers are required to notify MOM of retrenchments within 5 working days after they inform the affected employees. Notifying MOM of retrenchment exercises will enable Workforce Singapore (WSG), the tripartite partners – the Ministry of Manpower, the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF) – and other relevant agencies to help affected employees find alternative employment and/or identify relevant training to enhance employability.